Geopolitical storm rocks Bhilwara's loom as export crisis trumps power woes

Bhilwara, Rajasthan's famed 'Textile City' (home to over 400 weaving units and an estimated Ra 25,000 crore annual turnover), is reeling from a new, more severe crisis that overshadows its chronic power issues: the near-halt of exports to Bangladesh.

While the local industry has historically struggled with high power tariffs (up to Ra 9-9.50 per unit) and recurrent 12-hour power cuts, the immediate, financially crippling blow comes from geopolitical turmoil in Bangladesh. Bhilwara typically exports 50 per cent of its yarn and denim to its South Asian neighbour, a trade valued at an estimated Rs 2,000 crore annually.  This vital flow, up to Rs 200 crore per month has suddenly ceased due to uncertainty over payments, forcing producers to stop production, threatening the livelihoods of 65,000 direct workers.

The textile hub, known for its resilience and self-sufficiency in producing Poly-Viscose (PV), denim, and cotton fabrics, is now facing a dual challenge. On one hand, companies like RSWM Limited (part of the LNJ Bhilwara Group, a major player) reported a revenue increase in Q2FY24 but a Profit After Tax (PAT) decline due to sluggish demand, reflecting the global recessionary environment. On the other, the Bangladesh crisis adds an acute supply-chain shock.

The only silver lining is the potential to capture a small portion of the textile orders that Bangladesh is losing, which could boost India's sector. Industry leaders, like those from the Mewar Chamber of Commerce, are urgently calling for the government to help divert exports to alternative global markets and provide subsidies to manage the domestic cost pressures, especially as neighboring states like Madhya Pradesh and Gujarat aggressively woo Bhilwara's units with lower electricity rates and better incentives. The focus is shifting from power grid fixes to securing new global trade routes.